Sunday Feature: Pro's Ranch Markets' Set to Open Sixth 'Phoenix Ranch' Latino-Focused Phoenix Metro Region Supermarket in Mesa, Arizona On Wednesday

Latino Food & Grocery Marketing and Merchandising: Metropolitan Phoenix, Arizona Market Region

Metropolitan Phoenix, Arizona might be the most competitive food and grocery retailing market in the U.S.

The Phoenix market region might be close to becoming, or could already be, overstored when it comes to the number of stores that sell food and groceries relative to the region's consumer population. There's only so much "share of stomach," after all.

And the Phoenix Metropolitan region, along with the entire state of Arizona, is without a doubt hard hit by the current economic recession, housing foreclosure crisis and credit crisis. Additionally, for the first time in decades, according to the U.S. Census Bureau, Arizona isn't gaining residents but actually losing some.

But these circumstances aren't stopping family-owned Pro's Ranch Markets, which is headquartered in Ontario (Southern) California and has a regional office and a warehouse in Phoenix, Arizona, from opening another one of its Latino consumer-focused supermarkets in Arizona, specifically in the city of Mesa, in the Phoenix Metropolitan region. And like its current five supermarkets in and around Phoenix, Pro's Ranch Markets' new Mesa store will fly under the Phoenix Ranch Market banner, the retail brand it uses for its stores in Arizona.

The new Phoenix Ranch Market supermarket is located at 1118 E. Southern Avenue in Mesa. It's set to open at 10 a.m. on Wednesday, April 29, according to veteran grocer and Pro's Ranch CEO Mike Provenzano Sr, who heads up the family-owned chain that's run on a day-to-day basis by his four sons: Michael, Steve, Rick and Jeff. It's a family affair.

The new 61,320 square-foot Phoenix Ranch Market in Mesa is geared to Latino consumers. However, the store, like all of the grocer's other 11 supermarkets, also offers an ample selection of traditional "American" brands and products, and an abundance of fresh produce, meats, prepared foods and more, which appeal to consumers regardless of their ethnic background.

The Mesa Phoenix Ranch Market store will make 12 supermarkets in four states for the Provenzano clan and their extended family of employees to date.

In addition to the Mesa store set to open on Wednesday, the Provenzano family currently operates: five existing stores in the Phoenix Metro region (all under the Phoenix Ranch Market banner); four supermarkets in California's Central Valley (banners: Arvin Ranch Market, Delano Ranch Market, Bakersfield Ranch Market #1, Bakersfield Ranch Market #2); one store in El Paso, Texas (Pro's Ranch Market-El Paso) and one supermarket in Albuquerque, New Mexico (Pro's Ranch Market-Albuquerque). The Central Valley cities' names where the four stores are located are the same as the store names - Arvin, Delano and Bakersfield, California.

Pro's Ranch will be opening another new Phoenix Ranch Market supermarket in the Phoenix, Arizona Metro region next year. [See our June 26, 2008 story here: Phoenix, Arizona Metro Market Report: More Competition in an Already Hot Market as Pro's Ranch Markets Plans Two New Stores in Phoenix Metro Market.]

Pro's Ranch Markets also owns a Mexican restaurant in Phoenix, Arizona called Tradiciones.

A peek inside the new Mesa Phoenix Ranch Market

In addition to having aisles and shelves full of dry grocery, household and health and body care products geared to Latino shoppers, along with brands and items for shoppers of all ethnic backgrounds, the new Mesa store offers a wide-variety of in-store fresh foods and other specialty departments. Below is a peek inside the nearly-62,000 square foot Latino-focused Phoenix Ranch Market set to open on Wednesday, April 29, in Mesa, Arizona:

>The new Mesa store will have an in-store fresh bakery. The bakery will feature all varieties of authentic Mexican fresh-baked breads, desserts, pastries and more. It also will offer basic breads and items like donuts and the like.

Additionally, the in-store bakery will be staffed by cake decorating specialists who will prepare customized specialty cakes (birthdays, graduations, ect.) for customers.

>The supermarket has a large in-store Cocina (fresh, prepared hot foods; cocina means kitchen in Spanish) and a homemade tortilla factory, delivering hot bread and piping hot tortillas throughout the day. The in-store Cocina (see its menu sign above) really amounts to having a number of Mexican and Latin American-style restaurants all rolled up into one in-store area, offering numerous hot foods and dishes from throughout the region.

About the store's centerpiece Cocina and in-store tortilla-making factory, Mike Provenzano Sr.(who's often called "Mike Pro" for short by many in the grocery industry; hence the Pro's Ranch name) says: "The smell of fresh baked bread will greet you at the door. We will be making over 100,000 stone ground tortillas every day. This is home cooking at its finest."

>The store will feature a large meat department -- with both self-service meat cases and a full-service meat counter staffed by butcher's like the one pictured above, in one of the grocer's supermarkets -- that specializes in offering all of the types and cuts of meat used in Hispanic cuisine. "The meat market will also prepare carne asada for BBQ's and hand cut customer orders," Mike Provenzano Sr. says.

There's also an in-store Cremeria where many varieties of fresh, homemade sausages will be made and displayed for sale.

>There's a fresh juice and Aguas Frescas section in the store (part of the Cocina) where the drinks are made daily, along with an in-store fresh fruit bar for grab-and-go refreshments.

>Two other in-store fresh, prepared foods departments are: a complete seafood taco bar and a taqueria and torta meal station.

>And to top it all off, the supermarket has its very own in-store ice cream shop or station. The ice cream station will feature regular flavors of ice cream but specialize in the types and flavors of ice cream popular with Hispanic consumers -- and of course enjoyed by most all consumers, particularly in Arizona where Latino culture and cuisine is eaten by pretty much every resident, be they Italian, Irish, Asian or Heinz-57 American. About forty percent of Arizona's total population is Hispanic.

>The store will also have a complete check-cashing kiosk where customers can cash their checks. Latino consumers often prefer to cash their paychecks and other types of checks at the supermarket, rather than at a bank. Hispanic consumer-focused grocers like Pro's Ranch know this all too well. Therefore they not only welcome check cashing in their stores, they encourage it, and create special stations in the stores to make it easier for shoppers (and for the store' staff) to do so.

Focus on fresh

Latino consumers love fresh: produce, meats, bakery, seafood, dairy and more. Mike Provenzano Sr, says the new Mesa store will cater to this love of fresh foods in spades.

The fresh produce department is the centerpiece of the store. It will offer pretty much every type of fruit and vegetable Latino shoppers desire, along with numerous basic produce items consumers of all ethnic backgrounds, as well as Hispanics, desire.

It should be noted that Latino consumers, particularly second and third generation, and first generation who've been in the U.S. for sometime, adopt culinary likes just like Americans of all ethnic backgrounds do, along with retaining a love of traditional Hispanic foods.

They also love and buy brands like Coke, Colgate, Wesson Oil and the like that consumers of all ethnic backgrounds do. As a result, Hispanic consumer-focused retailer's like Pro's Ranch merchandise far more than strictly Mexican and Latin American brands and items in their stores.

And as a result of that fact, Latino consumer-focused format supermarkets are increasingly drawing consumers of all ethnic backgrounds, although Latino shoppers remain the core focus, to them for a variety of reasons: low prices, lots of fresh foods, specialty produce, meats and seafood not available at mainstream supermarkets, and the Mexican and other Latin prepared foods offered. Mexican food is about as mainstream as food can get in the U.S. -- especially in the Western U.S.

The fresh meat and seafood department at the new Mesa store is huge by traditional standards, and offers an extensive variety of items. Fresh Meat, fish and seafood (like produce) are signature departments in any supermarket worth its salt that caters to Latino shoppers.

And when it comes to fresh fish and seafood, Mike Provenzano Sr. is making a major claim about his new store in Mesa. He says the supermarket's expanded fish department will carry the largest variety of fresh fish and seafood of any store in Phoenix. If that turns out to be the case, we suspect the selection will appeal to shoppers of all ethnic backgrounds.

The new Mesa Phoenix Ranch Market store also offers numerous local touches, according to Provenzano Sr. The signature feature of those local touches from a store design perspective is a large wall mural of the early years of Mesa, Arizona that faces the checkout stands in the store's front end.

The store, like the grocer's other five stores in the Phoenix area, will carry a strong selection of produced-in-Arizona fresh foods, groceries and other items.

Mike Provenzano calls the new Mesa supermarket and its format an "upscale" market for the Mesa consumer. While Latino consumers remain his primary target, he clearly wants to draw shoppers of all ethnic backgrounds into the new supermarket.

"My family puts their heart and soul into these stores. My sons and I are proud of the communities we are in and want to give back to the neighborhoods that we work with," he says. "We take great care in building each store, providing the best food and service anywhere."

Food retailing as festive theatre

The Provenzano family and team believes food and grocery retailing and merchandising is as much festive theatre as it is mass marketing and merchandising.

For example, the small chain has its own official mascot, "Ranchie the Bull." "Ranchie" (pictured above with a produce clerk posing for a photographer) visits each of the 11 (soon to be 12) stores regularly, putting a particular focus on and giving most of his attention to the little shoppers in each supermarket.

In fact, "Ranchie the Bull" even has his own "kids' club" for Pro's Ranch Markets' youngest shoppers. [You can learn more about the "kids' club" here.

Rumor has it that "Ranchie" will be front and center and trolling the aisles for new and existing little members of his "kids' club" when the new Mesa store's opening on Wednesday.

Pro's Ranch Markets' also creates retail theatre in its stores by hosting numerous special events and promotions. They bring in Mariachi bands and Latin folkloric dancers, have food sampling activities throughout the store, and regularly do other special activities and hold special events designed to create a festive atmosphere in the stores, appealing to all of a shopper's senses.

Merchandising as theatre also is a key part of the retailer's strategy. A few of the techniques used include: building massive waterfall and other types of abundant displays in the produce department; having its tortilla-making machines visible so shoppers can watch workers making the tortillas; and using service meat and fish cases along with self-service, with attractive displays of meat and fresh fish and seafood displayed on ice.

By combining festive visual merchandising techniques with in store theatre like "Ranchie the Bull", Mariachi bans, festive decorations, food demonstrations and more, Pro's Ranch has been successful in building a pretty strong return customer base. The store prices are good -- but many shoppers also come back for the festive retail theatre. We suspect that many also return to see "Ranchie the Bull."

The Pro's Ranch stores also put a premium on customer service, both in the full-service departments, at checkout, in special areas like customer service and the check cashing kiosks, and throughout the store. Car carryout of shoppers' purchases is available if requested. Clerks are in the aisles to help shoppers. And the service departments like bakery, seafood and the like are well-staffed. It's one of the points of differentiation the grocer uses to compete against the mega-chains.

Service focus: Over 400 store employees

The grocer held a job fair in the Mesa store's parking lot on April 9-10 designed to hire about 400 employees for the new supermarket. That's a healthy number of employees, even for a 62,000 square-foot supermarket.

As an example, It takes about six small-format Fresh & Easy markets to equal the nearly 62,000 square-foot Mesa Phoenix Ranch Market. Each Fresh & Easy store employees 22-30 workers. So six Fresh & Easy stores combined (the square footage equal to the supermarket) at most employee 180 workers. That's less than half of what the new Phoenix Ranch Market will employee. That's an example of what we mean by a focus on service. The store is also expected to be very high volume.

A whopping 2,200 job-hunters attended the event to via for those about 400 jobs. CEO Provenzano Sr. said the grocer hired over 400 of the job seekers, nearly all of them from the neighborhood surrounding the store, to work in the new supermarket.

Mike Provenzano Sr. is a veteran grocer in California and the Western U.S. He's served in numerous leadership positions in the California Grocers Association (CGA) and has been a pioneer in advocating for and leading independent grocers in California, Arizona and elsewhere in the west.

He's also won food retailer of the year awards in California and Arizona for his store formats, merchandising and community service focus.

Excited about opening his first store in the city of Mesa, Pro's Ranch Markets' CEO Mike Provenzano Sr. says: "The Provenzano family is very excited to be embraced by the neighborhood and the community, and look forward to continue the strong relationship developed with our customers, highlighting each visit as a shopping experience. We are grateful to the City of Mesa, and the civic and neighborhood leaders for opening the doors to our family business."

Independent spirit alive in competitive Arizona

Arizona, and particularly the Phoenix Metro region which Mesa is a part of, might be a white-hot competitive food and grocery retailing market, but Mike Provenzano Sr. -- who ran mainstream supermarkets for many years before focusing on Latino consumer-focused grocery merchandising, and who understands and has taught his four sons through example that food retailing is festive theatre as well as mass merchandising -- is game, along with his four sons and the rest of the team, to stake millions of dollars on the new supermarket in Mesa and the next new store to open next year in the region.

Along with big chain-owned food and grocery retailing -- Wal-Mart, Kroger's Fry's, Safeway, Albertsons, Basha's, Costco, Target, Tesco's Fresh & Easy, Trader Joe's, Whole Foods Market and others -- independent grocery retailing is a factor and force in Arizona. And Pro's Ranch Market is staking a claim to that sector with the opening of its latest store on Wednesday.

Tesco's Fresh & Easy Neighbohrood Market has a store in Mesa.

Next format explosion: Latino-focused grocery retailing

With about 40% of Arizona's residents being of Hispanic heritage, along with the fact that Latino culture is a central part of Arizona's passed and present, there's still a strong niche in the state and in the Phoenix Metro market for new Hispanic-focused format retail stores and supermarkets, in our analysis.

Additionally, because Latino culture, including its cuisine, has such a central influence on all Arizona residents (consumers) regardless of their ethnic background, there's an added opportunity in Hispanic food and grocery product marketing and merchandising in the state and in the Phoenix Metropolitan market region.

This opportunity includes non-Hispanic format grocers that put a serious marketing and merchandising effort on attracting Latino consumers into their stores and offering them a selection of products and store departments that appeal to their likes and needs, be they Mexican-American, from Central America or elsewhere. (The majority of Latinos in Arizona are either from Mexico, or their parents or grandparents were born in that next door country. But their is a significant percentage of Arizona residents that come from other parts of Latin America as well.)

Wal-Mart believes that to be the case, which is why it has chosen Phoenix, Arizona as one of the first two states and market regions, the other being Houston, Texas, to launch the first two stores in its new Hispanic-focused format grocery market, "Supermercado de Walmart." The Phoenix "Supermercado de Walmart" unit will go into a current 39,000 square-foot Wal-Mart Neighborhood Market supermarket that the retailer is converting into its Hispanic-focused format Phoenix supermarket.

Latino-focused ethnic food and grocery retailing, like all forms and formats of food and grocery retailing in the Metropolitan Phoenix market continues to intensify and heat up.

We see Hispanic or Latino-focused retailing as the next exciting grocery retailing front to explode in Metro Phoenix, along with elsewhere in Arizona, despite the less than desirable factors we listed in the first three paragraphs of this story.

Stay tuned.